TTN Summary of 10:00ET Earnings Call: Indonesian smelter achieved first cathode production ahead of schedule, with first cathodes by month-end and design capacity targeted by year-end.
Wednesday, July 23, 2025 10:10:23 AMEST
- 2025 copper sales in 2H are nearly 10% above 1H; full-year net unit cash cost forecast of ~$1.55/lb (using $3,300/oz Au and $22/lb Mo), ~5¢/lb above April estimate; 2025 copper volumes ~1% below prior outlook, gold sales ~17% lower; 2026-27 volume guidance unchanged
- U.S. copper premium near $1.20/lb adds ~$1.7 B annual benefit on domestic sales; at a 25% premium, EBITDA +10% and cash flow +15% versus LME pricing
- Indonesia smelter commissioned ~1 month ahead of schedule, first cathode production expected by end-Q3 and ramp to design capacity by year-end – removes ~$0.30/lb export duty and nets ~15¢/lb to margins
- 2025 Grasberg gold output cut ~15% after draw-point ore-grade model recalibration – impact limited to 2025 with no change to multi-year production or copper plan
- Morenci field trial of proprietary leach additive underway with initial results “very impressive”; second additive shows superior lab performance; targeting 300 M lbs net run rate by YE and long-term 800 M lbs/year
- U.S. unit cash costs expected to decline toward ~$2.50/lb by 2027 via automation, contractor rationalization and precision leaching; monitoring ~5% tariff-driven cost impact and exploring supply-chain adjustments
- Brownfield project portfolio holds ~2.5 B lbs copper: Kuching Llr (2029-30 start), El Abra expansion (750 M lbs), Baghdad and Safford-Lone Star expansions; discretionary capex of $1.6-1.7 B/year in 2025-26
- Financial policy returns =50% of excess cash flow to shareholders – repurchased 2.9 M shares YTD at avg $36.41, including $107 M in Q2; >$5 B distributed since 2021; no significant maturities until 2027
- Copper fundamentals robust: global inventories low, secular electrification and AI/data-center buildouts driving demand; China remains key engine and U.S./Europe showing improvements
- Studying whether to expand copper smelter in Miami, AZ; Constructing a new US copper smelter would be very challenging
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- U.S. copper premium near $1.20/lb adds ~$1.7 B annual benefit on domestic sales; at a 25% premium, EBITDA +10% and cash flow +15% versus LME pricing
- Indonesia smelter commissioned ~1 month ahead of schedule, first cathode production expected by end-Q3 and ramp to design capacity by year-end – removes ~$0.30/lb export duty and nets ~15¢/lb to margins
- 2025 Grasberg gold output cut ~15% after draw-point ore-grade model recalibration – impact limited to 2025 with no change to multi-year production or copper plan
- Morenci field trial of proprietary leach additive underway with initial results “very impressive”; second additive shows superior lab performance; targeting 300 M lbs net run rate by YE and long-term 800 M lbs/year
- U.S. unit cash costs expected to decline toward ~$2.50/lb by 2027 via automation, contractor rationalization and precision leaching; monitoring ~5% tariff-driven cost impact and exploring supply-chain adjustments
- Brownfield project portfolio holds ~2.5 B lbs copper: Kuching Llr (2029-30 start), El Abra expansion (750 M lbs), Baghdad and Safford-Lone Star expansions; discretionary capex of $1.6-1.7 B/year in 2025-26
- Financial policy returns =50% of excess cash flow to shareholders – repurchased 2.9 M shares YTD at avg $36.41, including $107 M in Q2; >$5 B distributed since 2021; no significant maturities until 2027
- Copper fundamentals robust: global inventories low, secular electrification and AI/data-center buildouts driving demand; China remains key engine and U.S./Europe showing improvements
- Studying whether to expand copper smelter in Miami, AZ; Constructing a new US copper smelter would be very challenging